What Are the Two Primary Sources of Debt Financing

question 159

Short Answer

What are the two primary sources of debt financing?

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Definitions:

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to harmonize the law of sales and other commercial transactions across American jurisdictions.

Purchase-Money Security Interest (PMSI)

A security interest formed when a debtor uses borrowed money from the secured party to buy the collateral.

Unsecured Party

A creditor or lender that does not have rights to specific collateral if the borrower defaults.

Collateral

The property that is subject to a secured interest.